Truist Securities analyst Barry Jonas went to Las Vegas in mid-March and reported back in a March 23 investor note. His impressions were conflicted and filled with uncertainty.
While gaming companies were as yet unconcerned about higher fuel prices, neither were they seeing a boost from consumers’ tax refunds, Jonas found. He also felt that the current Persian Gulf war added to the uncertainty he experienced.
Signs of hope were found in the locals market, where the near-term pain of renovation disruptions was seen as giving way eventually to long-term gains. Similarly, underlying trends were described as strong and supportive of the bull case for the area.
Jonas also discerned a very choppy market or, as he put it, “peaks getting peakier, troughs getting troughier.” Event-driven periods such as the Consumer Electronics Show and Chinese New Year were still potent for business. “However, non-peak periods … are softer than ever.”
The analyst saw the possibility of business growth in the second quarter, aided by softer comparisons over the summer months. He added, “We think there is lots of programming planned to address the low-end softness.”
To that end, the Las Vegas Convention & Visitors Authority was said to be heavily pushing a value-oriented message, one that operators were emulating. “We’ll see how this evolves into summer 2026, though there’s always a risk of increasing occupancy at the expense of rate to drive what could ultimately be a lower-quality customer that isn’t all that additive,” Jonas mused.
A concert-driven event calendar in May promised a pickup after a soft April, while June was said to be “looking good too.” One unidentified operator told Jonas that occupancy would be steady over the summer, at lower room rates. “Given Las Vegas’s shorter booking window, this may be operators looking to build a better base of rate, contrasting from last year when rates were too high and moved lower as the booking window progressed.”
Jonas described operators as “cautiously optimistic.” An uptick in international visitation gave the higher-end casinos hope. Continued progress of that sort, Jonas said, would improve his wait-and-see outlook on MGM Resorts International.
Impressed with what he saw of in-progress Hard Rock Las Vegas, Jonas opined that its new hotel tower was “ taking shape as a key part of the Vegas skyline.” However, he warned that (unlike Fontainebleau and Resorts World), the newcomer could take a bite out of competitors. “Most operators felt it would grow the market,” Jonas said, “though it could be more competitive at the mid/high end while moving more momentum to the northern end of the Strip.
Speaking of construction, Jonas felt that it was a sold return-on-investment proposition for Station Casinos, which was in the process of renovating Sunset Station and Green Valley Ranch. Station was plowing $140 million into the Sunset revamp, which should stretch into early 2027. At Green Valley, Station was investing over $200 million in a complete redo of the resort, to which it might add a 2027 makeover of its sports book.
Jonas predicted sizable returns on both projects. “As a former Vegas resident who regularly frequented both establishments, we can say that the ‘before’ and ‘after’ images of the work completed so far isare striking, as is the general residential and business growth in the surrounding areas since both properties were last touched,” he added.
That said, Jonas allowed that construction upheaval was both real and disruptive. He noted that Station management had the savvy to move players away from the affected casinos, but that “construction fatigue” was negatively affecting foot traffic. He also questioned whether Station’s $9 million cash-flow hit in the first quarter was fully reflective of the problem.
Jonas skipped Durango Resort, but reported, “We did hear anecdotes that roadwork near [Station’s] Durango property (for an adjacent apartment complex) could be impacting visitation to some degree.” The interruption was scheduled to stretch into mid-April. However, he did not think the upheaval at Durango would dim its ROI prospects.
Boyd Gaming’s business was bifurcated. Destination-oriented properties like The Orleans were said to be feeling the Las Vegas Strip’s pain. But locals play was on the up. Even so, whatever play Boyd was losing in Sin City, it said it was making up at its midwestern and southern regional casinos.
The company, like Station, had three irons in the fire. Closest to home was $60 million Cadence Crossing, soon to open in Henderson. Farther out was a $175 million relocation of Peoria’s Par-A-Dice, while on the East Coast, Boyd was sinking $750 million into a Norfolk casino. Jonas added, “While management doesn’t appear thrilled with potential legalization of skill-based gaming in [Virginia], it feels confident regardless about the project given sizable demand and favorable demographics in the immediate area.”
Jonas was particularly impressed with Penn Entertainment’s enlargement of M Resort. He described its new hotel tower as “seamlessly integrated and should be a solid addition, helping the property expand its group business.” Not even the prospect of Station encroaching nearby on Cactus Lane dimmed his optimism about the strength of Penn’s ROI in the area.
Lastly, Jonas mulled the possibility of a bidding war for Caesars Entertainment. Although the analyst spent time with Caesars execs, “our discussions were strictly limited to Vegas operating trends.” He was positively impressed with new suites at Caesars Palace, “highlighting that any concerns over widespread deferred capex in the portfolio could be overstated.”
Still, he found that memories of the 2008 leveraged buyout of then-Harrah’s Entertainment (which eventually resulted in a bankruptcy) were haunting the 2026 discussions. Jonas concluded, “Any transaction here to take advantage of lingering valuation dislocation could be the first of many” mergers or acquisitions within the gaming industry.